How to Receive Money from Abroad: Your Guide to International Payments in India

In today's interconnected world, receiving money from overseas has become a routine necessity for many individuals and businesses in India. Whether it's a freelance professional getting paid for a project, a student receiving financial help from family abroad, or an exporter collecting payment for goods, the process of international money transfer plays a crucial role in everyday financial transactions.

International payments refer to the cross-border transfer of funds between individuals or institutions located in different countries. For Indians, this generally means receiving funds in INR (Indian Rupee) from a sender who may be using a foreign currency such as USD, GBP, EUR, or AED.

Why This Matters: Importance and Relevance Today

The significance of smooth international payments has grown in recent years, driven by global migration, remote work, e-commerce, and international education. Here's why this topic affects a wide range of people:

• Freelancers and Remote Workers: With the gig economy booming, many Indian professionals now offer services to international clients and rely on secure payment channels.

• Families and Students: Parents often send money from abroad to support children studying or living in India.

• Exporters and Small Businesses: SMEs and individual exporters need reliable systems to receive payments from global customers.

• NRI Families: Non-Resident Indians frequently send money home for maintenance, investment, or personal reasons.

The right system ensures faster delivery, better exchange rates, and minimal transaction costs. Understanding the available options and regulations helps avoid delays and financial penalties.

Recent Trends and Updates (2024–2025)

The international payment landscape is evolving rapidly, with several changes introduced in the last year:

• Integration of UPI with Cross-Border Payments: In early 2024, the NPCI (National Payments Corporation of India) partnered with several countries like Singapore and UAE to enable UPI-linked wallets for inward remittances. This makes small remittances faster and cheaper.

• Liberalised Remittance Scheme (LRS) Threshold Reminders: As of April 2024, the Reserve Bank of India reaffirmed the annual cap of USD 250,000 per individual under LRS for receiving or sending funds. This policy helps track international flows and prevent tax evasion.

• Digital Banks and Fintech Entry: Platforms like Wise, Revolut, and Payoneer have expanded their services to better support Indian account holders receiving funds globally, offering multi-currency wallets and improved exchange rates.

• Improved KYC Guidelines: Due to concerns about fraud and money laundering, banks and financial institutions tightened their KYC (Know Your Customer) norms for receiving international funds. This includes verifying the purpose of the transaction and the identity of the sender.

Here’s a quick snapshot of UPI-linked countries for remittances (as of May 2025):

In India, the process of receiving foreign money is regulated by the Foreign Exchange Management Act (FEMA), 1999, overseen by the Reserve Bank of India (RBI). Key policies and procedures include:

1. FEMA Compliance

• All international money transfers must adhere to FEMA rules.

• Purpose codes are mandatory to explain why the money is being sent (e.g., family maintenance, export of goods/services).

2. RBI-Approved Channels

• Only authorized dealers (ADs) and financial institutions approved by the RBI can process international remittances.

• These include most major banks like HDFC, ICICI, SBI, and foreign exchange platforms like Western Union, Xoom, and Wise.

3. PAN and KYC Requirements

• If the amount exceeds INR 50,000 in a single transaction, the recipient must submit their PAN.

• Full KYC details are required for repeated or high-value transactions.

4. Tax Considerations

• As per the Income Tax Act, if the remittance is treated as income (like freelance payment), it may be subject to tax.

• Family maintenance or gift transfers up to INR 50,000 per year are generally exempt from tax.

5. Liberalised Remittance Scheme (LRS)

• Though typically for outward remittance, LRS indirectly affects the inward remittance process by setting annual limits and reporting requirements.

Tools, Platforms, and Services You Can Use

Several banks, fintech apps, and online tools are available to receive money securely in India. Here are some trusted options:

A. Bank Transfers (SWIFT Network)
Most international transfers are done via the SWIFT code system. Indian banks like SBI, HDFC, Axis, and ICICI allow you to receive money directly into your account through SWIFT.

Pros: Secure, widely used
Cons: Higher charges, longer processing (2–5 days)

B. Online Money Transfer Services
These platforms are especially popular among freelancers, families, and small exporters:

UPI-based wallets like PhonePe and Google Pay are slowly rolling out cross-border capabilities in partnership with global payment systems. Though limited in scope now, this is a growing area.

D. Forex Accounts / NRE Accounts
If you're an NRI or frequently receive funds, an NRE (Non-Resident External) account is a tax-free rupee account for foreign income.

E. Online Currency Converters & Calculators
Use tools like XE.com, OANDA, or Wise's Currency Calculator to check real-time rates before confirming transfers.

Frequently Asked Questions (FAQs)

Q1. What is the fastest way to receive money from abroad in India?
A: Services like Western Union or Remitly offer instant transfers, especially for family remittances. Wise and Payoneer are also fast and reliable for freelancers.

Q2. Are there any taxes on receiving international money in India?
A: If the amount is a gift or family maintenance, it's usually not taxable up to INR 50,000 annually. However, income from work (like freelancing) is taxable. It's important to declare foreign income in your Income Tax Return (ITR).

Q3. Can I receive dollars directly in my savings account?
A: No, Indian savings accounts accept funds only in INR. The amount will be converted from foreign currency to INR based on the bank's exchange rate at the time of transfer.

Q4. Is PayPal still a valid option for receiving money in India?
A: Yes, but it is limited. As of 2021, PayPal shut down domestic services in India but still allows receiving international payments. Funds must be linked to an Indian bank account for withdrawal.

Q5. What details do I need to share with the sender abroad?
You will typically need to share:

• Your full name (as per bank records)

• Your bank’s SWIFT code

• Account number

• IFSC code (for local identification)

• Purpose code (if required by the bank)

Conclusion

Receiving money from abroad in India is now easier, more transparent, and accessible than ever. With multiple secure options—ranging from traditional bank transfers to modern fintech apps—individuals and businesses can manage international payments efficiently.

Understanding the associated legal, tax, and policy aspects ensures compliance and reduces risks. Whether you’re a freelancer, a student, or part of a global family, staying informed helps you choose the best method that balances speed, cost, and convenience.